FTSE rises to 4-month closing high, spurred by oil

Reuters: [2008-05-16 18:09:00]

By Dominic Lau

LONDON, May 16 (Reuters) - Britain's benchmark index rose 0.8 percent on Friday to hit its highest closing level in four months as surging crude prices pumped oil shares higher, while bid activity powered British Energy <BGY.L>.

The FTSE 100 <.FTSE> closed up 52.5 points at 6,304.3, but well off its day's high of 6,348.6 after a survey showed U.S. consumer confidence tumbled to its lowest in 28 years this month.

The index gained 1.6 percent this week, but is still down 2.4 percent for the year.

"We had the lowest consumer confidence figures in the U.S. since the 1980s so that's really what turns the U.S. negative. No doubt that's going to put a cap on UK stocks as well going into next week," said Martin Slaney, head of derivatives at GFT Global Markets.

Topping the gainers, British Energy leapt 5.2 percent to 715.5 pence after saying it had received a range of takeover proposals, including some prices above Thursday's closing price of 680 pence. [ID:nL16387334]

London Stock Exchange <LSE.L> surged 5.1 percent on market talk of bid interest after Sanford Bernstein said in a report that the fall in its share price had brought the UK bourse within reach of Nasdaq <NDAQ.O> and NYSE Euronext <NYX.N>.

Oil shares added nearly 26 points to the index as crude prices <CLc1> shot to a record high near $128 a barrel.

BP <BP.L> advanced 1.5 percent, Royal Dutch Shell <RDSa.L> rose 2.8 percent and Tullow Oil <TLW.L> put on 3.2 percent.

Miners were mixed, with Anglo American <AAL.L>, Xstrata <XTA.L>, Lonmin <LMI.L> and Vedanta Resources <VED.L> up. But Antofagasta <ANTO.L>, Eurasian Natural Resources <ENRC.L>, BHP Billiton <BLT.L> and Rio Tinto <RIO.L> were down.

Morgan Stanley said investors would be wise to lock in profits in miners and oil shares as the two sectors had outperformed by 66 and 30 percent respectively in the last 12 months.

"Both levels (of outperformance) are unusually high and are historically consistent with a subsequent period of underperformance," the broker said in a report, adding investors should favour defensive stocks, such as tobacco.

Major European indexes also finished the day higher, while U.S. stocks eased after the Reuters/University of Michigan consumer sentiment survey although data showed construction starts on new homes rose stronger than expected.

Banks remained weak, with Royal Bank of Scotland <RBS.L> off 3.4 percent after the Financial Times said Warren Buffet's Berkshire Hathaway Inc <BRKa.N> had pulled out of the bidding in the 7 billion pound ($13.6 billion) auction of its UK insurance business. RBS was not immediately available for comment.

Barclays <BARC.L> lost 2 percent and HSBC <HSBA.L> ticked down 0.1 percent, but HBOS <HBOS.L> and Lloyds TSB <LLOY.L> were higher.

The Bank of England reiterated its mortgage swap plan has no upper limit and refused to forecast any final total after media reports that banks could exchange assets worth well above the estimate of initial demand. [ID:nL16524349]

British Airways <BAY.L> climbed 4 percent after it unveiled its first dividend payment since 2001 after meeting forecasts with a 45 percent rise in annual profit.

Sainsbury <SBRY.L> shed 1.3 percent to extend recent losses after recent negative broker comments which followed the supermarket group issuing results on Wednesday.

(Additional reporting by Rebekah Curtis and Michael Taylor; editing by Sue Thomas) ((dominic.lau@reuters.com; +44 20 7542 5440; Reuters Messaging: dominic.lau.reuters.com@reuters.net))

     
 * For related prices, Reuters Terminal users may click on - * 
 UK stock report     [.L/R]     
 FTSE index:         <0#.FTS6>  
 techMARK 100 index: <.FTT1X>         FTSE futures:     <0#FFI:> 
 Gilt futures:       <0#FLG:>         Smallcap index:    <.FTSC> 
 FTSE 250 index:     <.FTMC>          FTSE 350 index:    <.FTLC> 
 Market digest:      <.AD.L>          Top 10 by vol:     <.AV.L> 
 Top price gainers:  <.NG.L>          Top % gainers:     <.PG.L> 
 Top price losers:   <.NL.L>          Top % losers:      <.PL.L> 
  
 * For related news, click on - * 
 UK hot stocks:      [HOT&GB]         Wall Street:          [.N] 
 Gilts report:       [GB/]            Euro bond report [GVD/EUR] 
 Pan European stock report: [.EU] 
 Tokyo stocks:       [.T]             HK stocks:           [.HK] 
 Sterling report:    [GBP/]           Dollar report:      [USD/] 
  
 * For company prices, click on - * 
 Company directory:  <UKEF>           By sector:          <FTAX> 
  
 * For pan-European market data and news, click on - * 
 Daily European stocks report........................[.EU] 
 European Equities speed guide................<EUR/EQUITY> 
 FTSE Eurotop 300 index...........................<.FTEU3> 
 DJ STOXX index...................................<.STOXX> 
 Top 10 STOXX sectors........................<.PGL.STOXXS> 
 Top 10 EUROSTOXX sectors...................<.PGL.STOXXES> 
 Top 10 Eurotop 300 sectors..................<.PGL.FTEU3S> 
 Top 25 European pct gainers....................<.PG.PEUR> 
 Top 25 European pct losers.....................<.PL.PEUR> 
  Keywords: MARKETS BRITAIN STOCKS =2 
    

FTSE up 1.2 pct as bid talk buzzes, oils power on

Reuters: [2008-05-16 13:40:00]

By Rebekah Curtis

LONDON, May 16 (Reuters) - Britain's blue-chip index rose 1.2 percent at midday on Friday, as bid activity powered British Energy <BGY.L> and crude price stormed past $125 a barrel to inject zest into heavyweight oil shares. Oil major BP <BP.L> added 1.6 percent and rival Royal Dutch Shell <RDSa.L> rose 2.1 percent as U.S. crude oil <CLc1> surged on a weaker dollar and a bullish market for distillate fuels as China and Europe scramble for diesel amid thin global supplies. BG Group <BG.L> put on 1.6 percent.

Topping the gainers, shares in London Stock Exchange <LSE.L> surged 7.8 on market talk of bid interest after Sanford Bernstein said in a report the fall in its share price has made the UK bourse an affordable target of rivals Nasdaq <NDAQ.O> and NYSE Euronext <NYX.N>.

Nuclear power generator British Energy <BGY.L> leapt 6.5 percent to 724 pence after saying it had received a range of takeover proposals, including some priced above Thursday's 680-pence close. For more double-click on [ID:nL16387334].

By 1129 GMT, the FTSE 100 <.FTSE> was up 75.4 points at 6,327.2, as shares forged higher across Europe. U.S. stocks looked set to extend gains after the S&P 500 ended the previous session at its highest close since January.

"The market's been incredible lately," said Colin Morton, an investment director at Rensburg Fund Management. "People are getting a bit more optimistic that life is getting a little better."

He added, however, that is was too early to have confidence in a sustained upturn. "I'm a little nervous of the market because it's had such a strong run in such a short period and some of the issues that we've had could come back to haunt us."

BA TAKES OFF

Bolstering sentiment, British Airways <BAY.L> climbed 6.1 percent after announcing a dividend of 5 pence, the first payment since 2001, and lifting annual profits 45 percent.

The airline also said it is braced for a turbulent year with fuel costs set to rise 1 billion pounds ($1.95 billion).

Banks also pushed higher, with HBOS <HBOS.L> up 2.4 percent, Standard Chartered <STAN.L> rising 2.2 percent and Lloyds TSB <LLOY.L> 2 percent higher.

Royal Bank of Scotland (RBS) <RBS.L> fell 1.3 percent, however. Warren Buffett's Berkshire Hathaway Inc <BRKa.N> has pulled out of the bidding in the 7 billion pound ($13.62 billion) auction of its UK insurance business, the Financial Times reported. RBS was not immediately available to comment.

The Bank of England reiterated on Friday its mortgage swap plan has no upper limit and refused to speculate on any final total after media said banks could exchange assets worth nearly twice the initial estimate.

The Financial Times newspaper, citing debt market sources, said British banks may be preparing to swap between 80 and 90 billion pounds of hard-to-shift mortgage-backed assets for highly-tradable government debt to free up their balance sheets.

[ID:nL16524349]

Sainsbury <SBRY.L> dropped 1.3 percent to extend recent losses after recent negative broker comments which followed the supermarket group issuing results on Wednesday. [ID:nL14274565] (Additional reporting by Dominic Lau and Michael Taylor; editing by David Hulmes) ((rebekah.curtis@reuters.com; +44 20 7542 4365; Reuters Messaging: rebekah.curtis.reuters.com@reuters.net)) ($1=.5138 Pound)

Keywords: MARKETS BRITAIN STOCKS

 * For related prices, Reuters Terminal users may click on - * 
 UK stock report     [.L/R]     
 FTSE index:         <0#.FTS6>  
 techMARK 100 index: <.FTT1X>         FTSE futures:     <0#FFI:> 
 Gilt futures:       <0#FLG:>         Smallcap index:    <.FTSC> 
 FTSE 250 index:     <.FTMC>          FTSE 350 index:    <.FTLC> 
 Market digest:      <.AD.L>          Top 10 by vol:     <.AV.L> 
 Top price gainers:  <.NG.L>          Top % gainers:     <.PG.L> 
 Top price losers:   <.NL.L>          Top % losers:      <.PL.L> 
  
 * For related news, click on - * 
 UK hot stocks:      [HOT&GB]         Wall Street:          [.N] 
 Gilts report:       [GB/]            Euro bond report [GVD/EUR] 
 Pan European stock report: [.EU] 
 Tokyo stocks:       [.T]             HK stocks:           [.HK] 
 Sterling report:    [GBP/]           Dollar report:      [USD/] 
  
 * For company prices, click on - * 
 Company directory:  <UKEF>           By sector:          <FTAX> 
  
 * For pan-European market data and news, click on - * 
 Daily European stocks report........................[.EU] 
 European Equities speed guide................<EUR/EQUITY> 
 FTSE Eurotop 300 index...........................<.FTEU3> 
 DJ STOXX index...................................<.STOXX> 
 Top 10 STOXX sectors........................<.PGL.STOXXS> 
 Top 10 EUROSTOXX sectors...................<.PGL.STOXXES> 
 Top 10 Eurotop 300 sectors..................<.PGL.FTEU3S> 
 Top 25 European pct gainers....................<.PG.PEUR> 
 Top 25 European pct losers.....................<.PL.PEUR> 
  Keywords: MARKETS BRITAIN STOCKS =2 
    

British Energy bids power FTSE early; oils rise

Reuters: [2008-05-16 10:07:00]

By Rebekah Curtis

LONDON, May 16 (Reuters) - British blue-chip shares rose 0.5 percent early on Friday, as British Energy <BGY.L> powered ahead on receiving bid approaches at a premium and British Airways <BAY.L> climbed after setting its first dividend since 2001.

Heavyweight oil stocks tracked higher with crude prices, which approached $125 a barrel, led by the bullish heating oil market as China and Europe scramble for barrels, thinning global supply.

Oil major BP <BP.L> and its rival Royal Dutch Shell <RDSa.L> both added 1.1 percent and BG Group <BG.L> put on 1.4 percent.

Nuclear power generator British Energy <BGY.L> leapt 5.7 percent to 718.5 pence to top the FTSE 100 <.FTSE> leaderboard after saying it had received a range of takeover proposals, including some priced above Thursday's 680-pence close. For more double-click on [ID:nL16300245].

Centrica <CNA.L>, which rose 0.3 percent, and France's EDF <EDF.PA> were prepared to make offers at less than 700p/share, sources familiar with the matter told Reuters last week.

By 0752 GMT the FTSE 100 was up 34 points at 6,285.8, as shares rose across Europe. Overnight U.S. stocks rose, with the S&P 500 hitting its highest close since January.

"Confidence does seem to be coming from the suggestion that the U.S. economy has ridden out the storm...so the FTSE may have more legs in it even yet," said Neil Parker, a strategist at Royal Bank of Scotland.

"(But) there's still a lot of nervousness out there. By no means are we going into this blind, there are still a lot of people trading very cautiously," he added.

"I don't want to pour cold water on what is a decent picture, but ...investors are likely to prove reluctant to drive this current rally much further," RBS's Parker added.

BA, BANKS GIVE INDEX A LIFT

British Airways (BA) <BAY.L> added 3.6 percent after unveiling a 5 pence per share dividend and lifting annual profits 45 percent.

BA also said that as a result of further hedging, it now expected every $1 change in the crude oil price to affect profit by 16 million pounds, down from 18 million previously.

Banks gained broadly, with Alliance & Leicester <ALLL.L>, Lloyds TSB <LLOY.L> and HBOS <HBOS.L> each adding about 1 percent.

The UK's biggest banks are preparing to swap 80-90 billion pounds of mortgage-backed assets for Treasury bills with the Bank of England, nearly twice as much as the central bank originally envisaged, the Financial Times reported.

The scheme was put in place to unblock the bank-lending market, the paper said.

(Editing by Andrew Callus) ((rebekah.curtis@reuters.com; +44 20 7542 4365; Reuters Messaging: rebekah.curtis.reuters.com@reuters.net))

Keywords: MARKETS BRITAIN STOCKS

FTSE up 0.6% as results boost; commodities rise

Reuters: [2008-05-15 18:30:00]

By Michael Taylor

LONDON, May 15 (Reuters) - Britain's blue-chip index ended up 0.6 percent on Thursday boosted by a flurry of results, while rising U.S. crude <CLc1.L> and metal prices sent heavyweight commodity shares higher.

The FTSE 100 <.FTSE> gained 35.8 points to 6,251.8 but is still down more than 3 percent this year.

On a busy day for corporate earnings, BT <BT.L> contributed most points to the index, climbing 5.4 percent after the telecoms operator posted a rise in fourth-quarter underlying core earnings, in line with forecasts, and said it expected to deliver continued growth next year. [ID:nL15241021]

British confectioner Cadbury <CBRY.L> added 3.9 percent on the back of first-half sales growth and persistent merger talk.

The maker of Dairy Milk chocolate, Trident gum and Halls cough drops, which demerged its North American Dr Pepper Snapple Inc soft drinks business this month, said first-half growth in confectionery sales would beat its 4-6 percent target range. [CBRY.L-RTRS-LEN]

SABMiller <SAB.L>, the world's biggest brewer, also tacked on 3.9 percent after beating forecasts with a 19 percent rise in annual earnings and said it expects to raise beer prices to offset soaring commodity costs. [ID:nL14836372]

On the downside, Barclays <BARC.L> slipped 2 percent. It said profits fell in the first quarter -- but did not say by how much -- after it took a 1 billion pound writedown on assets tarnished by the credit crunch. The bank also refused to rule out a rights issue. [ID:nL15355889] [ID:nWLB1645]

HBOS <HBOS.L>, Lloyds TSB <LLOY.L> and Alliance & Leicester <ALLL.L> lost between 0.4 and 1.4 percent. Royal Bank of Scotland <RBS.L>, trading ex-rights, edged up.

"Volumes are pathetic," said Howard Wheeldon, senior strategist at BGC Partners. "It's been a much quieter day than it deserved to be bearing in mind it has been a heavy results day."

Across the Atlantic, U.S. stocks were little changed as a report showing softer-than-expected U.S. industrial output for April followed weak manufacturing data from the New York Federal Reserve.

SLICK OILS

Commodity shares rose across the board, with oil shares a standout gainer as traders pointed to a UBS sector upgrade due to the continuing trend of higher U.S. crude oil <CLc1> prices.

The bank raised the price targets of numerous stocks in the sector and upgraded others, while U.S. crude topped $125 a barrel, boosted partly by weakness in the U.S. dollar.

Shell <RDSa.L>, Tullow Oil <TLW.L>, BP <BP.L> and Cairn Energy <CNE.L> were up 0.2-4.3 percent.

Higher metal prices and persistent consolidation hopes buoyed mining shares, with BHP Billiton <BLT.L>, Rio Tinto <RIO.L> and Antofagasta <ANTO.L> up between 2.1 and 2.6 percent. Some sector stocks have been at record levels this week.

Among losers, ITV <ITV.L> shed 1.6 percent despite the broadcaster saying its turnaround plan was on track as it had outperformed the television advertising market and increased audience share. [ID:nL15423665]

Thomas Cook <TCG.L> shed 5.1 percent as it became the latest travel firm to say that Europeans' appetite for summer holidays remains undimmed, despite fears of a consumer downturn.

But the stock fell after the company noted the decision by Germany's Federal Cartel Office to extend the deadline for completion of its evaluation of the proposed takeover of the group's German charter airline Condor by Air Berlin <AB1.DE>.

"We have seen a lot of jitters in the FTSE 100... although we have finished positive, a lot of investors are still choppy because of the weak banking sector," said James Hughes, an analyst at CMC Markets on the overall picture.

"The oil and mining shares are performing well and that has been offsetting a weaker banking sector. In general, investors are still worried about the market." (Additional reporting by Dominic Lau, Rebekah Curtis and Shapi Shacinda; editing by David Hulmes)

((michael.taylor@reuters.com; +44 207 542 0919; Reuters messaging: michael.taylor.reuters.com@reuters.net))

Keywords: MARKETS BRITAIN STOCKS

 * For related prices, Reuters Terminal users may click on - * 
 UK stock report     [.L/R]     
 FTSE index:         <0#.FTS6>  
 techMARK 100 index: <.FTT1X>         FTSE futures:     <0#FFI:> 
 Gilt futures:       <0#FLG:>         Smallcap index:    <.FTSC> 
 FTSE 250 index:     <.FTMC>          FTSE 350 index:    <.FTLC> 
 Market digest:      <.AD.L>          Top 10 by vol:     <.AV.L> 
 Top price gainers:  <.NG.L>          Top % gainers:     <.PG.L> 
 Top price losers:   <.NL.L>          Top % losers:      <.PL.L> 
  
 * For related news, click on - * 
 UK hot stocks:      [HOT&GB]         Wall Street:          [.N] 
 Gilts report:       [GB/]            Euro bond report [GVD/EUR] 
 Pan European stock report: [.EU] 
 Tokyo stocks:       [.T]             HK stocks:           [.HK] 
 Sterling report:    [GBP/]           Dollar report:      [USD/] 
  
 * For company prices, click on - * 
 Company directory:  <UKEF>           By sector:          <FTAX> 
  
 * For pan-European market data and news, click on - * 
 Daily European stocks report........................[.EU] 
 European Equities speed guide................<EUR/EQUITY> 
 FTSE Eurotop 300 index...........................<.FTEU3> 
 DJ STOXX index...................................<.STOXX> 
 Top 10 STOXX sectors........................<.PGL.STOXXS> 
 Top 10 EUROSTOXX sectors...................<.PGL.STOXXES> 
 Top 10 Eurotop 300 sectors..................<.PGL.FTEU3S> 
 Top 25 European pct gainers....................<.PG.PEUR> 
 Top 25 European pct losers.....................<.PL.PEUR> 
  Keywords: MARKETS BRITAIN STOCKS=2 
    

BT, Cadbury lift FTSE, but Barclays hits banks

Reuters: [2008-05-15 13:27:00]

By Rebekah Curtis

LONDON, May 15 (Reuters) - Britain's top shares index rose by midday on Thursday, as results boosted BT <BT.L> and Cadbury <CBRY.L>, but banks capped gains after Barclays <BARC.L> refused to rule out a rights issue after posting a $2 billion writedown.

BT contributed most points to the index, gaining 3.7 percent after the telecoms operator posted a rise in fourth-quarter underlying core earnings, in line with forecasts, and said it expected to deliver continued growth next year. [ID:nL15241021]

Cadbury rose 5 percent after the confectionery company said it expected strong first-half performance. The stock also benefited from upbeat broker notes from Numis and Panmure.

By 1109 GMT, the FTSE 100 <.FTSE> reversed earlier losses to rise 10.6 points, or 0.2 percent, to 6,226.6 as the broader European stock market traded flat.

Leading the losers' list, Barclays <BARC.L> shed 3.4 percent after saying profits fell in the first quarter after it took a 1 billion pound writedown on assets tarnished by the credit crunch, but it did not disclose the extent of its profit fall.

The bank also refused to rule out a rights issue. [ID:nL15355889] [ID:nWLB1645]

HBOS <HBOS.L>, Lloyds TSB <LLOY.L> and Alliance & Leicester <ALLL.L> lost between 1.2 and 2 percent. Royal Bank of Scotland <RBS.L>, trading ex-rights, edged up.

"(The sector's) going to be a bit of a burden for the market for some while. We have to resign ourselves to the fact that that's one sector that we can't expect very much from," Mike Lenhoff, chief strategist at Brewin Dolphin, said.

"We probably aren't going to go anywhere in the very short term," he added. "The market is probably set to trade around this level for a little while."

Elsewhere, Wall Street looked set to rise at the start on Thursday with the focus on earnings from key retailers JC Penney <JCP.N> and Nordstrom <JWN.N> along with tech company Hewlett-Packard <HPQ.N>.

MINERS DRAG

Miners were also standout losers after recent gains and after Indian-focused Vedanta Resources <VED.L> posted a 7.1 percent fall in annual underlying earnings per share despite stronger output, reflecting a share issue and higher minority interests. [ID:nL15326109]

Vedanta dipped 1 percent, while BHP Billiton <BLT.L>, Rio Tinto <RIO.L> and Antofagasta <ANTO.L> all shed between 0.7 and 1.6 percent. Some stocks in the sector have been trading at record levels this week.

Xstrata <XTA.L> lost 0.9 percent. The miner bid nearly $400 million for Australia's Indophil Resources <IRN.AX>, which rejected the offer and said it did not reflect the value of the company. [ID:nSYD139264]

Oil stocks capped some of the index's losses, however, with BP <BP.L> up 0.7 percent and its rival Royal Dutch Shell <RDSa.L> rising 0.9 percent as U.S. crude oil prices recovered towards $125 a barrel.

Brewer SABMiller <SAB.L> advanced 4.4 percent. The company reported a 19 percent rise in annual earnings but said beer volume growth in its current first-half would be affected by high input costs and comparative figures. [ID:nL14836372]

ITV <ITV.L> shed 3 percent after the broadcaster said its turnaround plan was on track as it had outperformed the television advertising market and increased audience share. [ID:nL15423665]

Among mid-caps, DSG International <DSGI.L>, Europe's largest specialist retailer, dropped 9.4 percent after announcing it would slash its dividend and shut stores in an effort to turn around the business. (Additional reporting by Dominic Lau; editing by Sue Thomas) ((rebekah.curtis@reuters.com; +44 20 7542 4365; Reuters Messaging: rebekah.curtis.reuters.com@reuters.net))

 * For related prices, Reuters Terminal users may click on - * 
 UK stock report     [.L/R]     
 FTSE index:         <0#.FTS6>  
 techMARK 100 index: <.FTT1X>         FTSE futures:     <0#FFI:> 
 Gilt futures:       <0#FLG:>         Smallcap index:    <.FTSC> 
 FTSE 250 index:     <.FTMC>          FTSE 350 index:    <.FTLC> 
 Market digest:      <.AD.L>          Top 10 by vol:     <.AV.L> 
 Top price gainers:  <.NG.L>          Top % gainers:     <.PG.L> 
 Top price losers:   <.NL.L>          Top % losers:      <.PL.L> 
  
 * For related news, click on - * 
 UK hot stocks:      [HOT&GB]         Wall Street:          [.N] 
 Gilts report:       [GB/]            Euro bond report [GVD/EUR] 
 Pan European stock report: [.EU] 
 Tokyo stocks:       [.T]             HK stocks:           [.HK] 
 Sterling report:    [GBP/]           Dollar report:      [USD/] 
  
 * For company prices, click on - * 
 Company directory:  <UKEF>           By sector:          <FTAX> 
  
 * For pan-European market data and news, click on - * 
 Daily European stocks report........................[.EU] 
 European Equities speed guide................<EUR/EQUITY> 
 FTSE Eurotop 300 index...........................<.FTEU3> 
 DJ STOXX index...................................<.STOXX> 
 Top 10 STOXX sectors........................<.PGL.STOXXS> 
 Top 10 EUROSTOXX sectors...................<.PGL.STOXXES> 
 Top 10 Eurotop 300 sectors..................<.PGL.FTEU3S> 
 Top 25 European pct gainers....................<.PG.PEUR> 
 Top 25 European pct losers.....................<.PL.PEUR> 
  Keywords: MARKETS BRITAIN STOCKS =2